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Simple English definitions for legal terms
lapsed policy
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A quick definition of lapsed policy:
A lapsed policy is an insurance policy that is no longer active because the policyholder has not paid the required premiums. This means that the policy is no longer providing coverage for the insured person or property. Most policies have a grace period of 30-31 days after nonpayment of premiums, but after that time, the policy will lapse. It is important to keep up with premium payments to ensure that your insurance policy remains active and provides the coverage you need.A more thorough explanation:
A lapsed policy is an insurance policy on which the policyholder has failed to make premium payments. This means that the policy is no longer in effect and the policyholder is no longer covered by the insurance. Most insurance policies have a grace period of 30 or 31 days after nonpayment of premiums, but after that time, the policy will lapse.
For example, if John has a life insurance policy but fails to make his premium payments for two months, his policy will lapse and he will no longer be covered by the insurance.